Quality Growth Boutique

Many emerging markets are more resilient to external shocks than in the past and can better withstand the pressures of a stronger US dollar. And so far, many EMs have been fairly conservative in their use of stimulus in response to Covid-19. This increases the potential for prosperous times ahead.

The US government launches 2 new rules aimed at ESG and proxy voting. Individually they appear investor-first, but taken together may be seen as a political agenda to limit investor activism from social and environmental interest groups. We are concerned about the impact on effective stewardship.

The ongoing trade war and eroding U.S.-China relationship have been a catalyst for making it less attractive for Chinese companies to seek a public listing in the United States. The Chinese government is finally making good on promises to open up domestic markets to foreign investors. Additionally, Hong Kong and China are taking steps to make local listings more attractive, especially to high-tech start-ups.

Our equity experts from the Quality Growth Boutique are constantly trying to find exceptional companies. In this insight, they explore businesses that may be high quality today that were not in the past. Does the current COVID crisis change the playbook for investors in any way?

Ethnic minorities account for 40% of the US population, 29% of bachelor degrees, but just 16% of Fortune 500 board seats. Sub-conscious bias plays a big role. A structured approach to hiring and mentoring are required for change. Diversity can drive innovation and shareholder returns.

Like a pendulum, once equity markets swing one way, they will swing back. Investors can manage market swings by actively allocating to international equities using 3 timeless tactics: diversification, exposure to a unique opportunity set of strong businesses, and buying at attractive valuations.

Portfolio Manager Ed Walczak and Client Portfolio Manager Grant Bughman provide an update on the markets, US Equity portfolio positioning and outlook.

3 steps to help navigate the storm: recognize change, keep an eye on your horizon, and get ahead of structural shifts that will follow the shock of death and economic damage. How we frame the crisis in terms of capital preservation and recovery will affect investment decisions.

We are now witnessing a market panic as the continued spread of the coronavirus is threatening a global recession. Portfolio managers Ramiz Chelat, Jin Zhang and David Souccar explain how they are adjusting their portfolios to take advantage of market dislocations and why quality growth businesses can help provide downside protection.

Modern slavery affected an estimated 89 million people during the 5 years to 2016 – more than Germany’s population. Its profits creep into our homes through imported goods enabled by complex supply chains. Imported goods with content produced by forced labor is a central problem. Active investors have a role.

Jin Zhang provides insights on changes in the global supply chain, long-term beneficiaries of the trade war, India’s growth prospects and Brazil’s path to reform.

David Souccar talks about markets in 2019, long-term structural risks, performance over the cycle, investing in Japan, and international vs US exposure.